Renato Molina, University of Miami

We evaluate the effect of climate adaptation infrastructure investments on property transaction prices, using data on over four hundred thousand property transactions and nearly two hundred adaptation infrastructure projects in the Miami-Dade county, an area that is highly vulnerable to sea level rise due to climate change. Using a difference-in-differences estimator, we find significant gains in property values after completion of infrastructure projects. These gains are concentrated in areas 0-200 meters from the boundary of the project polygon. We then calculate the return on investment for the adaptation infrastructure projects. Summing over a large number of properties protected by each project results in an aggregate benefit net of adaptation cost of about $20 million per project, and about $3 billion in aggregate net benefits for all projects. Most projects generated positive net benefits, indicating that the vast majority of adaptation efforts are being placed in areas of need that pass the benefit-cost test.

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